The odh model controller is currently applying labels to namespaces for modelmesh to be able to deploying serving runtimes in the namespace. This responsibility is going to be moved to odh-dashboard – Once it has been moved over we should get rid of the logic from odh-model-controller:

https://github.com/opendatahub-io/modelmesh-serving/blob/main/odh-model-controller/controllers/inferenceservice_namespace.go#L30